Urban Land Rent and Residential Location Choices of Key Workers: Evidence from New Zealand’s Integrated Data Infrastructure

Why are essential workers (also known as key workers) priced out of the urban areas where essential services are concentrated? This paper addresses that question by linking residential sorting to the governance of land and housing markets in Auckland, New Zealand. Drawing on bid rent theory and motivated by Crane’s theoretical framework, this study examines how households trade off urban accessibility against housing costs with varying degrees of job location uncertainties and time pressure. The analysis uses the micro-level household data from Statistics New Zealand (Stats NZ)’s Integrated Data Infrastructure (IDI) to examine how key-worker households position themselves within the city’s rental market relative to other working households. The results show a clear urban land rent gradient: rents fall with distance from the city centre. However, access to the central location is not evenly distributed across workers. Key workers, whose jobs are typically tied to more fixed workplaces, are more inclined to live farther from the city centre to lower housing costs. By contrast, workers facing tighter time constraints, especially those working longer hours, show a stronger preference for living near the CBD to improve work proximity and reduce commuting burdens. This pattern remains evident among private vehicle commuters, suggesting that time pressure, rather than transport mode alone, is an important factor shaping residential location choice. The paper argues that this is not simply a housing market outcome but also a land-governance problem. When central land values rise without corresponding housing options for key workers, cities risk pushing socially necessary labour towards peripheral areas. The findings highlight the need for land-use and housing interventions that improve the spatial match between where key workers live and where urban services are most needed.